BMW is evolving. Whereas once there were premium sector cars and mainstream models, the Bavarian company has, through the enormous success of the 3-Series model, blurred these boundaries. While still able to charge premium prices for the Three, BMW have at the same time outsold cars like the Ford Mondeo and the Vauxhall Vectra in the UK. It's a fine balancing act and one that BMW hope to carry off even more successfully with the latest generation 3-Series.

By all accepted theories of economics, what BMW are doing shouldn't be possible. Preserving the brand equity and guaranteeing firm residual values ought to prove impossible with the sheer numbers of 3-Series flying off dealer forecourts and although resale values of the old E46 model 3-Series aren't as strong as they once were, this has as much to do with the car being replaced by the E90 generation model as anything else.

There's always a certain level of hyperbole surrounding new car launches but the 3-Series warrants the superlatives. BMW executives describe the 3-Series as "the defining car of its generation and market sector" and it's impossible to argue otherwise. As much as Mercedes and Audi would like to disagree, the 3-Series is the benchmark car in the compact executive sector. Always has been and likely always will be.

"The BMW 3-Series is the benchmark car in the compact executive sector. Always has been and likely always will be?."

Developing an all-new 3-Series was never going to be easy and the latest car, priced from just over £21,035 in the Saloon bodystyle we look at here, shows that the money men and the stylists have gone head to head in the battle between shifting big numbers and continuing the trend for challengingly styled BMWs. It looks like the stylists have blinked first, the 3-Series looking a good deal more conservatively penned than the rest of the BMW line up. Although those wearing the black polo necks may grumble, it's a wise choice. With the 3-Series accounting for fully 52 per cent of BMW's UK sales, alienating this bedrock of customers with a wilfully odd looking car was never going to make a sound business case. Although sales of the latest 5-Series have swelled as people became used to its sharky lines, for the first few months that styling was manna from heaven for Mercedes and Audi.

Many of the contemporary BMW styling signatures are present although they have been toned down radically. The sill line is bowed, although nowhere near as radically as in, say, a 1-series. Compare how the rear bootlid is a chamfered and smoothed version of that worn by the 5-Series. Even the flanks betray a less aggressive concave contouring, while the rest of the traditional BMW cues such as the 'Hofmeister Kink' at the rear window and the kidney grille are present and correct. Although it's not what you'd call a striking piece of design, it is nevertheless mature, assured and classy.

BMW's EfficientDynamics technology is now present across the 3-Series range. While other manufacturers were messing about with hybrids and biofuels in their attempts to go green, BMW developed a programme that enhances a vehicle's efficiency through a series of small measures that have a big combined effect. Features including Auto Start-Stop, Brake Energy Regeneration, high precision direct injection, active aero dynamics and optimum gear shift indicators go into EfficentDynamics and the results put BMW products near the top of the tree when it comes to environmental considerations.

Ten main engines are available. The entry-level units are the 318s, with the petrol-powered 'i' propping up the diesel-driven 'd'. The 318i has the same 143bhp engine as the 118i and is capable of 0-60mph in 9.1s. Fuel economy of 47.9mpg is not to be scoffed at but even this looks a little thirsty next to the 318d's incredible 60.1mpg. The 318d is slightly slower with a 9.3s 0-60mph time. The 320i is an engine based on the architecture of the 318i motor. This engine jumps to a round 170bhp. Capable of covering the sprint to 60mph in 8.2 seconds and able to hit 142mph, the 320i can also manage to eke 46.3 miles from a gallon of unleaded. If you can find just over £2,500 more, the 325i offers 39.8mpg economy but 218bhp and significantly more performance.

Also highly capable is the 320d, BMW's biggest seller in the old E46 generation car. In this instance, power runs to 177bhp. This diesel will take a fraction under eight seconds to get to 60mph and posts a top speed of 143mph. The 58.9mpg fuel economy figure is a real standout. If that's not fast enough, there are three other diesel variants on offer. First up is the 197bhp 325d, which sits just below the 231bhp 330d in the pecking order. Flagship of the diesel line-up is the 335d which ups the ante to a massive 286bhp - in return for a price tag getting on towards £35,000.

In the petrol line-up, pride of place goes to the 330i and 335i models. The 330i features a 3.0-litre Valvetronic engine with technology that does away with conventional throttle butterflies in favour of a complex electrically-powered valve lifting system. Constructed from an aluminium and magnesium composite, this engine sits tucked well back in the car's cavernous engine bay and gives the car excellent weight distribution. Less weight also equates to better performance, more agile handling and lower fuel consumption and emissions.

This engine punches well above its modest weight, knocking out 272bhp at 6,600rpm. On the road this translates into a surprising amount of heft. The sprint to 60mph from rest will disappear in just 6.1 seconds and will run into BMW's self-imposed electronic limiter at 155mph with plenty to spare. Despite this, the fuel economy figures are better than you might expect at 39.2mpg. The flagship turbocharged 335i model meanwhile, manages 306bhp and demolishes the 0-60mph sprint in just 5.6s.

Bigger, quicker, cleaner and more economical - the 3-Series looks set to continue its astounding success. The styling looks spot on and if BMW can continue to maintain the prestige image balanced against huge sales, the E90 3-Series will be just the latest model to promotional sleight of hand. It's all a question of image and perception. Do we buy it? Looking at the continuingly healthy order bank for the 3-Series, the answer seems to be an unqualified affirmative.